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Friday, May 13, 2016

How to find a good mortgage company

By Moneycation

Securing the right mortgage from the right mortgage lender can be taxing. There's too much red tape in the works that make it fairly easy for the average Joe with his/her untrained eyes to miss several key things from prospected plans. Below, you'll find out what exactly a mortgage company is, and most importantly, how to choose one from the dozens of registered companies operating in the country. 

What is a mortgage company?  

These lenders are involved in the business of writing and funding mortgages for either residential or commercial real estate. Contrary to common belief, mortgage companies do not provide the actual capital used to procure property, but rather act as the originator of the mortgage. The funds come from one of many partnering financial institutions that the mortgage company has already established a relationship with.  

Post-recession mortgage lenders 

A vast majority of mortgage companies filed for bankruptcy during the 2008 crisis involving subprime mortgage loans. Since they do not fund most or all of their offered loans, most companies had their assets dry up and their cash flow rapidly corrode. Nevertheless, the industry remains vibrant and a great number of companies are still in operation.
Credit score impacts mortgage rates

Boost your credit score

Your credit score has the single largest impact on your monthly interest payments. Before consulting a mortgage company, tie up loose ends by paying small outstanding balances on your credit cards and utility bills. If necessary, take some time to build a credit score to reduce total mortgage cost.

Contact a mortgage company

You don't necessarily have to apply for a mortgage to be able to speak with a representative and inquire. You can learn by contacting the company's provided number and asking about their offered programs. If the loan officer seems too aggressive, unhelpful, or shady, you should hang up the phone and look for a different mortgage company. The location of a mortgage lender and the time of year are also factors in determining their worth as evident in Consumer Financial Protection Bureau data.

Mortgage loan tips
September and December are the best months to apply for a home loan per government research

Compare quality of mortgage plans 

Every mortgage company handles things differently, at least to some extent. For this reason, you should request and obtain a written statement or spreadsheet that details all important information relevant to the mortgage program. To simplify the process of comparing different mortgages, limit your questions to the interest rate, points, and all fees charged. Sure, you can also ask about tax and insurance, yet both of these unknowns can be determined later. 

Select a mortgage lender

Finding a good mortgage company is not rocket science. However, it does involve a level of complexity that substantial preparation and research helps with. Use the guidelines above to give you a robust foundation before looking for a mortgage company. You can also find a lot of useful online informationcomparing mortgage companies to help you find one that suits your needs. One team reviewed 181 lenders over the course of 6 weeks, speaking with experts, digging into the rates and getting pre-approved to find the best mortgage companies out there. You can take a look at their full resource here: http://www.reviews.com/mortgage-companies/

Images: 1. Pne/Wikipedia, CC BY 2.0; 2.  LauraHale/Wikipedia, CC BY-SA 3.0